Manglona orders Bellas to continue efforts to resolve GOB’s tax matter

U.S. District Court for the NMI Chief Judge Ramona V. Manglona ordered attorney Timothy H. Bellas yesterday to continue his efforts to resolve the Garment Oversight Board’s tax matter with the Internal Revenue Service informally.

Manglona also ordered Bellas, as administrator of the Garment Residual Charitable Fund, to report to the court by July 11, 2014, if he is unable to resolve the tax matter with the IRS.

Manglona is satisfied that Bellas made diligent efforts to resolve the GOB tax matter.

The lawyer was also directed to continue safeguarding the GRCF funds still in his trust account until further court orders.

Regarding the donation of $98,700 in GRCF money to 19 charitable groups, the judge said she reviewed the submission and the supporting documentation and is satisfied that the funds were properly disbursed to the organizations, as authorized by the court’s Feb. 20, 2014, order.

Bellas used to serve as chairman of the GOB, which was set up pursuant to the $20-million settlement agreement in a class action against the CNMI’s garment industry.

In GRCF’s interim report filed last week in court, Bellas disclosed that he donated a total of $98,700 in residual money from the class action to 19 charitable organizations. He said the net amount remaining in trust for the GRC is $14,940.21.

In that same report, Bellas also discussed GOB’s tax matter. He said he has made several inquiries in an effort to resolve the residual tax matter with various branches/divisions of the IRS. “None of those efforts have proved meaningful,” Bellas said.

He said he has been unable to contact someone with sufficient legal background to be able to comprehend the unique circumstances of the GOB and its creation.

Bellas told Saipan Tribune last week that IRS asked for $4,000 in Social Security contributions for some of the money that was given away by GOB.

Bellas said he previously wrote to IRS, explaining that the GOB is not an employer.

He said IRS then went back to him, telling him that GOB should pay double because of penalty.

Bellas said if this attempt to resolve the matter by negotiation and settlement ultimately proves unsuccessful within the next 60 days, he shall seek further guidance from the court on how to proceed in closing this matter.

The federal court closed the GOB in October 2008. The Garment Workers Trust Fund was then formed, which Bellas also chaired. In June 2010, the U.S. District Court for the NMI approved the final report of the Garment Workers Trust Fund and closed the file.

In November 2013, the federal court appointed Bellas to distribute the residual funds that were previously held in trust for a contingent liability that never required payment.

In January 2010, Bellas also donated a total of $625,000 to 14 non-profit organizations on Saipan. In June 2010, the remaining balance of $5,314.07 was donated to the Friends of the Library.